As a child, my father always made sure that I was fully aware of how money worked. I came from a family that did not have a lot of money, so we mostly just purchased the essentials. However, growing up this way was a great opportunity to understand that children of all ages can learn financial practices. Learning how to budget and to think about long-term financial goals are very valuable lessons your children will carry over into adulthood.
Learning to Budget at Any Age
Understanding how to allocate money for the things a person wants and needs is a very important concept. However, it does look a little bit different depending on the age of the child. Here are some suggestions of how you can teach your child to budget at any age:
Ages 3 - 6
The earlier you can start this lesson, the better. When you start with a child who is under 6 years of age, you can teach them about how to wait when purchasing something that they want. Give them a jar or piggy bank and tape a picture on it of the item that they are saving up for. Give them a small amount of money each week to put into the piggy bank. This is a great opportunity to teach your child what patience is and why it is important.
Ages 7 - 10
When a child reaches the age of 7, he or she might be ready to learn a little bit more behind the concept of a budget. At this age, a child tends to not realize the difference between needing something and wanting something.
A great way to teach budgeting to children is to give them a certain amount of money and ask the kids to create a budget for dinner. For younger kids or ones that do not understand how to add, you can simplify the menu and help them with it. This will help the child to learn that they may have to be choosy when shopping since they have a limited amount of money. I remember as a child I was given $5 and told “you will be setting up dinner for the whole family tonight.” I was so excited and had many items picked out. We added up what it would cost and, of course, it was well over my $5 budget. So my mother asked what things could we could do without. She suggested thinking about what each family member likes, what we need in each food group, and even suggested cheaper brands of some items. At 10 years old, I learned what was truly needed verses what I wanted. I also learned that some food taste the same no matter what brand it is!
Ages 11 - 14
When a child is older, you can go into more detail and deeper in concepts. Sometimes children think that money is just given to us from the bank, but at this age you can start a savings account to teach the importance of investing. They can watch interest accrue if they leave it alone and then get paid for being patient (Matthew 25:27). When I was 12 and started to babysit, I thought it was awesome to have “lots” of money. However, I learned that if you frequently spend your money on small items, then you can’t save up for the big ones.
I remember really wanting a new Walkman. I knew my parents could not afford one, but by golly I was going to get one of my own! So all my babysitting money was placed in a savings account. The only way I could get to my money was actually asking my parents to take me to the bank and fill out a withdrawal slip. My father was smart and set up the account so it was hard for me to access it. It really helped me think carefully about how to save and to be picky about what I purchase. Of course, you can also teach your children other styles of savings such as CDS and savings bonds, but for me actually receiving a statement each month and seeing it grow - even if it was just a few cents at a time - really meant something to me.
Ages 15 – 17
For students that are in high school, teaching the concept of finance for college and future living on their own is very important. At this age there were only a few things my parents would pay for; the rest I had to have a job to purchase. To some this may seem to be too much, but let me tell you, if I had not learned this way I may not be the person I am today.
I learned to sow and reap from my hard work and rejoice in my earnings. I respected the cost of things and even researched before purchasing items. I have friends today that still are not financially stable due to not understanding how to budget their income. Budgeting and thinking about the cost of college should be two of the most important financial lessons to discuss with your high school children. They will need to know how to move on in life and to be able to not stress over silly financial situations.
Overall, finance is a big part of life. We are stewards of the money God has given us to use. Every child needs to know how to handle money. If you are ever curious about more ways to develop your child’s understanding of good financial practices, there are many lessons and games online. Some banks even have programs and websites for mock check books and budgeting to help your child get started. Enjoy this time with your kids, but remind them that the true treasures are in Heaven (Colossians 3:2).
God Bless, Mandee Mittler